The U.S. Treasury recently announced that participants in Healthcare Flexible Spending Accounts would now be able to carry over $500 of unused funds into the next year, but only if your employer chooses to allow it. Employers can allow either a 2.5 month grace period after the end of the year or the $500 rollover, but not both. Or they could be punks and offer neither. This could start as early as this year for 2013 funds. Various sources: CNN Money, Forbes, WSJ
I like the proposal that these “use-it-or-lose-it” FSAs be simply rolled into Health Savings Accounts which are currently only available to those with high-deductible health plans. The infrastructure and administrators (bank and brokerage holding accounts) already exist, and that way people can simply set aside some tax-protected money for health care for an indefinite period without worrying about losing it. Don’t make people predict their own medical expenses, that’s the main reason we need insurance.
This is also a reminder that there are less than two months left in 2013, so here’s a link to my post on ideas for using up your FSA funds.